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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For quarterly period ended June 30, 2002
-------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
----------- -------------
Commission file number 0-18539
---------
EVANS BANCORP, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 16-1332767
- ---------------------------------- -----------------------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14 -16 North Main Street, Angola, New York 14006
------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(716) 549-1000
----------------------------
(Issuer's telephone number)
Not applicable
----------------------------
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check (X) whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
Common Stock, $.50 Par Value--2,215,441 shares as of June 30, 2002
INDEX
EVANS BANCORP, INC. AND SUBSIDIARY
PAGE
PART 1. FINANCIAL INFORMATION
- -------------------------------
Item 1. Financial Statements (Unaudited)
Consolidated balance sheets-June 30, 2002 and
December 31, 2001 1
Consolidated statements of income-Three months
ended June 30, 2002 and 2001 2
Consolidated statements of income-Six months
ended June 30, 2002 and 2001 3
Consolidated statements of stockholders' equity-Six months
ended June 30, 2002 and 2001 4
Consolidated statements of cash flows-Six months
ended June 30, 2002 and 2001 5
Notes to consolidated financial statements
7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
Item 3. Quantative and Qualitative Disclosures About Market Risks 18
PART II. OTHER INFORMATION 19
Item 1. Legal Proceedings
Item 2. Changes In Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES 20
PART I - FINANCIAL INFORMATION PAGE 1
ITEM I - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
June 30, 2002 and December 31, 2001
(Unaudited)
June 30, December 31,
ASSETS 2002 2001
------------ ------------
Cash and due from banks $ 9,544,645 $ 7,894,087
Federal Funds sold 2,825,000 2,800,000
Securities:
Classified as available-for-sale, at fair value 88,518,475 81,735,376
Classified as held-to-maturity, at amortized cost 2,868,052 2,329,855
Loans, net 147,702,545 142,469,032
Properties and equipment, net 4,440,545 4,122,733
Goodwill, net 2,932,913 2,760,113
Other intangible assets, net 328,850 83,250
Other assets 4,891,039 4,958,966
------------ ------------
TOTAL ASSETS $264,052,064 $249,153,412
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Demand $ 45,102,458 $ 39,597,700
NOW and money market accounts 11,449,208 9,604,537
Regular savings 69,261,275 64,351,240
Time Deposits, $100,000 and over 30,306,202 28,864,608
Other time accounts 61,836,509 61,841,977
------------ ------------
217,955,652 204,260,062
Other Borrowed Funds 9,360,821 9,660,748
Securities sold under agreements to repurchase 2,858,509 4,006,669
Other liabilities 4,781,355 4,265,164
------------ ------------
TOTAL LIABILITIES 234,956,337 222,192,643
------------ ------------
STOCKHOLDERS' EQUITY
Common Stock, $.50 par value; 10,000,000 shares authorized;
2,215,441 and 2,206,467 shares issued respectively 1,107,721 1,103,234
Capital surplus 13,885,565 13,727,084
Retained earnings 12,652,911 11,464,273
Accumulated other comprehensive income (net of tax) 1,449,530 666,178
------------ ------------
Total Stockholders' equity 29,095,727 26,960,769
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $264,052,064 $249,153,412
============ ============
See NOtes to Consolidated Financial Statements.
PART I - FINANCIAL INFORMATION PAGE 2
ITEM I - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months ended June 30, 2002 and 2001
(Unaudited)
Three Months Ended
June 30,
2002 2001
----------- -----------
INTEREST INCOME
Loans $ 2,677,586 $ 2,841,004
Federal funds sold 11,777 19,745
Securities:
Taxable 719,622 765,510
Non-taxable 494,334 372,118
----------- -----------
Total Interest Income 3,903,319 3,998,377
INTEREST EXPENSE
Interest on Deposits 1,137,350 1,585,421
Short Term Borrowing 138,317 113,856
----------- -----------
NET INTEREST INCOME 2,627,652 2,299,100
PROVISION FOR LOAN LOSSES 105,000 95,000
----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 2,522,652 2,204,100
----------- -----------
NON-INTEREST INCOME:
Service charges 283,350 258,543
Premium on loans sold-SLMA 900 1,559
Premium/Discount on loans sold-FNMA 7,795 2,785
Insurance Service and Fees 714,606 627,678
ENB Associates 59,741 50,880
Other 191,280 157,759
ORE loss (61,791) 0
Securities Gain 101,067 72,395
----------- -----------
Total non-interest income 1,296,948 1,171,599
----------- -----------
NON-INTEREST EXPENSE:
Salaries and employee benefits 1,346,788 1,171,550
Occupancy 318,005 289,599
Supplies 59,187 52,205
Repairs and maintenance 99,607 93,861
Advertising and public relations 46,147 41,228
Professional services 119,908 146,745
FDIC assessments 8,655 8,540
Other Insurance 75,614 57,137
Amortization of goodwill 0 79,620
Evans Bancorp expense 39,633 79,744
Other 461,970 368,632
----------- -----------
Total non-interest expense 2,575,514 2,388,861
----------- -----------
Income before income taxes 1,244,086 986,838
----------- -----------
INCOME TAXES 317,000 336,735
----------- -----------
NET INCOME $ 927,086 $ 650,103
=========== ===========
NET INCOME PER COMMON SHARE-BASIC $ 0.42 $ 0.30
=========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 2,213,945 2,198,324
=========== ===========
See Notes to Consolidated Financial Statements.
PART I - FINANCIAL INFORMATION PAGE 3
ITEM I - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
For the Six Months ended June 30, 2002 and 2001
(Unaudited)
Six Months Ended
June 30,
2002 2001
----------- -----------
INTEREST INCOME
Loans $ 5,427,750 $ 5,643,244
Federal Funds Sold 40,181 82,421
Securities:
Taxable 1,423,964 1,522,300
Non-taxable 955,467 751,504
----------- -----------
Total Interest Income 7,847,362 7,999,469
INTEREST EXPENSE
Interest on Deposits 2,314,868 3,280,259
Short Term Borrowing 287,658 212,390
----------- -----------
NET INTEREST INCOME 5,244,836 4,506,820
PROVISION FOR LOAN LOSSES 210,000 170,000
----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 5,034,836 4,336,820
----------- -----------
NON-INTEREST INCOME:
Service charges 556,733 494,565
Premium on loan sold-SLMA 1,100 1,914
Premium/Discount on loans sold-FNMA 20,141 4,225
Insurance Service and Fees 1,506,409 1,302,798
ENB Associates 94,664 68,230
Other 422,357 353,820
ORE loss (61,791) 0
Securities Gain 111,302 88,139
----------- -----------
Total non-interest income 2,650,915 2,313,691
----------- -----------
NON-INTEREST EXPENSE:
Salaries and employee benefits 2,691,325 2,414,316
Occupancy 637,740 580,772
Supplies 109,520 116,802
Repairs and maintenance 206,147 189,085
Advertising and public relations 95,952 69,369
Professional services 279,237 231,307
FDIC Assessment 17,225 17,156
Other Insurance 137,940 143,991
Amortization of goodwill 0 159,240
Evans Bancorp expense 107,545 85,541
Other 905,683 721,357
----------- -----------
Total non-interest expense 5,188,314 4,728,936
----------- -----------
Income before income taxes 2,497,437 1,921,575
----------- -----------
INCOME TAXES 691,000 616,335
----------- -----------
NET INCOME $ 1,806,437 $ 1,305,240
=========== ===========
NET INCOME PER COMMON SHARE-BASIC $ 0.82 $ 0.59
=========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 2,210,206 2,198,895
=========== ===========
See Notes to Consolidated Financial Statements.
PART 1-FINANCIAL INFORMATION PAGE 4
ITEM 1-FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 2001
(UNAUDITED)
==========================================================================================================================
ACCUMULATED
OTHER
COMMON CAPITAL RETAINED COMPREHENSIVE TREASURY
STOCK SURPLUS EARNINGS INCOME ( LOSS) STOCK TOTAL
Balance, January 1, 2001 $ 879,801 $ 13,810,991 $ 9,953,780 $ 534,500 $ 0 $ 25,179,072
Comprehensive income:
2001 net income 1,305,240 1,305,240
Unrealized gain on available
for sale securities, net of
reclassification adjustment
and tax effect of $81,378 172,927 172,927
------------
Total comprehensive income 1,478,167
------------
Cash dividends ($.27 per
common share) (475,092) (475,092)
Purchase of 3,086 shares
for treasury (145,042) (145,042)
Five-for-Four stock split 219,720 219,720
w/fractional shares paid in cash (241,317) (241,317)
Reissuance of treasury stock under stock 145,042 145,042
dividend plan of 3,086 shares
----------- ------------ ------------ --------- --------- ------------
Balance, June 30, 2001 $ 1,099,521 $ 13,569,674 $ 10,783,928 $ 707,427 $ 0 $ 26,160,550
=========== ============ ============ ========= ========= ============
SIX MONTHS ENDED JUNE 30, 2002
(UNAUDITED)
==========================================================================================================================
ACCUMULATED
OTHER
COMMON CAPITAL RETAINED COMPREHENSIVE TREASURY
STOCK SURPLUS EARNINGS INCOME ( LOSS) STOCK TOTAL
Balance, January 1, 2002 $ 1,103,234 $ 13,727,084 $ 11,464,273 $ 666,178 $ 0 $ 26,960,769
Comprehensive income:
2002 net income 1,806,437 1,806,437
Unrealized gain on available
for sale securities, net of reclassification
adjustment and tax effect of $506,753 783,352 783,352
------------
Total comprehensive income 2,589,789
------------
Dividends ($.28 per
common share) (617,799) (617,799)
Issued 8,974 shares under dividend
reinvestment plan 4,487 158,481 162,968
----------- ------------ ------------ --------- --------- ------------
Balance, June 30, 2002 $ 1,107,721 $ 13,885,565 $ 12,652,911 $ 1,449,530 $ 0 $ 29,095,727
============ ============ ============ ============ =========== ============
PART I - FINANCIAL INFORMATION PAGE 5
ITEM I - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2002 and 2001
(Unaudited)
Six Months Ended
June 30,
2002 2001
------------ ------------
OPERATING ACTIVITIES
Interest received $ 7,931,801 $ 8,073,684
Fees and commissions received 2,437,606 2,014,127
Interest paid (2,636,958) (3,556,681)
Cash paid to suppliers and employees (4,931,754) (2,856,182)
Income taxes paid (748,800) (858,000)
------------ ------------
Net cash provided by operating
activities 2,051,895 2,816,948
------------ ------------
INVESTING ACTIVITIES
Available for sale securities
Purchases (27,334,287) (20,930,358)
Proceeds from sales 8,450,326 6,897,405
Proceeds from maturities 13,412,319 8,230,278
Held to maturity securities
Purchases (1,485,816) (862,092)
Proceeds from maturities 972,820 1,577,611
Additions to properties and equipment (639,747) (277,313)
Increase in loans, net of repayments (9,954,923) (10,852,966)
Proceeds from sales of loans 4,623,681 3,053,596
Proceeds from sales of other real estate owned 71,620 0
Cash paid in acquisition of Eden Agency (50,000) 0
------------ ------------
Net cash used in investing activities (11,934,007) (13,163,839)
------------ ------------
FINANCING ACTIVITIES
Increase in deposits 13,695,590 5,115,837
(Repayment)purchase of short term borrowing (1,683,089) 5,340,182
Dividends paid (454,831) (496,689)
------------ ------------
Net cash provided by financing
activities 11,557,670 9,959,330
------------ ------------
Net increase(decrease) in cash and cash
equivalents 1,675,558 (387,561)
Cash and cash equivalents, January 1 10,694,087 9,358,912
------------ ------------
Cash and cash equivalents, June 30 $ 12,369,645 $ 8,971,351
============ ============
See Notes to Consolidated Financial Statements.
PART I - FINANCIAL INFORMATION PAGE 6
ITEM I - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2002 and 2001
(Unaudited)
Six Months Ended
June 30,
2002 2001
----------- -----------
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net income $ 1,806,437 $ 1,305,240
----------- -----------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 468,746 711,599
Provision for loan losses 210,000 170,000
Gain on sale of assets (70,752) (94,569)
Decrease in accrued interest payable (34,432) (64,032)
(Increase)decrease in accrued interest receivable (1,800) 55,814
Decrease in other liabilities (302,199) (847,261)
(Increase)decrease in other assets (24,105) 1,580,157
----------- -----------
Total adjustments 245,458 1,511,708
----------- -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES $ 2,051,895 $ 2,816,948
=========== ===========
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION:
Net unrealized gain on available for sale securities $ 2,387,237 $ 1,040,335
=========== ===========
See Notes to Consolidated Financial Statements.
Page 6
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2002 and 2001
(UNAUDITED)
1. GENERAL
-------
The accounting and reporting policies followed by Evans Bancorp, Inc.,
(the "Company") a bank holding company, and its wholly-owned subsidiary,
Evans National Bank, (the "Bank") and the Bank's wholly-owned
subsidiaries, ENB Associates Inc., ("ENB"), M&W Agency, Inc., ("M&W")
and Evans National Holding Corp ("ENHC") in the preparation of the
accompanying interim financial statements conform with generally
accepted accounting principles and with general practice within the
banking industry.
The accompanying consolidated financial statements are unaudited. In the
opinion of management, all adjustments necessary for a fair presentation
of financial position and results of operations for the interim periods
have been made. Such adjustments are of a normal recurring nature.
The results of operations for the six month period ended June 30, 2002
are not necessarily indicative of the results to be expected for the
full year.
2. SECURITIES
----------
Securities which the Bank has the positive ability and intent to hold to
maturity are stated at cost, plus discounts accrued and less premiums
amortized. Securities which the Bank has identified as available for
sale are stated at fair value.
3. ALLOWANCE FOR LOAN LOSSES
-------------------------
The allowance for loan losses represents the amount charged against the
Bank's earnings to establish a reserve or allowance sufficient to absorb
expected loan losses based on management's evaluation of the loan
portfolio. Factors considered include future loan concentrations,
charge-off history, delinquent loan percentages, input from regulatory
agencies and general economic conditions. Management's provision for
loan losses reflects its current assessment of the New York State and
local economy. Both have lagged behind national prosperity, which is now
unsettled. Marginal job growth, in conjunction with a declining
population base, has left the Bank's market more susceptible to
potential credit problems during an economic downturn. This is
particularly true of commercial borrowers. Commercial loans represent a
segment of significant past growth as well as concentration in the
Company's real estate portfolio. Commercial real estate values may be
susceptible to decline in an adverse economy. Management believes that
the reserve is also in accordance with regulations promulgated by the
OCC, and is reflective of its assessment of the local environment as
well as a continued growth trend in commercial loans.
4. REVENUE RECOGNITION
-------------------
The Bank's primary sources of revenue are interest income from loans and
investments and service charge income. The revenue is recognized in the
period in which it is earned. M&W's revenue is derived mainly from
insurance commissions. The revenue is recognized on the accrual basis of
accounting in accordance with generally accepted accounting principles.
5. INCOME TAXES
------------
Provision for deferred income taxes is made as a result of timing
differences between financial and taxable income. These differences
relate principally to directors deferred compensation, pension premiums
payable and deferred loan origination expenses.
6. PER SHARE DATA
--------------
The per share of common stock information is based upon the weighted
average number of shares outstanding during each period, retroactively
adjusted for stock dividends and stock splits. Only basic earnings per
share is disclosed because the Company does not have any dilutive
securities or other contracts to issue common stock or convert to common
stock.
Page 7
7. DIVIDEND
--------
A cash dividend of $0.28 per share was paid on April 2, 2002 to
shareholders of record as of March 12, 2002. A total of $617,799 was
paid on 2,206,467 shares.
8. STOCK SPLIT
-----------
A 5 for 4 stock split was distributed on June 12, 2001 to shareholders
of record as of May 25, 2001. Fractional shares were redeemed for cash.
The stock split resulted in the issuance of 439,441 shares of common
stock as well as fractional shares paid in cash totaling $21,597. All
share and per share data reflect the split.
9. COMMON STOCK
------------
During the quarter ended June 30, 2002, the Company issued 8,974 shares
of common stock. These shares were issued to shareholders on April 2,
2002 who elected to receive shares in lieu of cash under the Company's
Dividend Reinvestment Plan.
10. SEGMENT INFORMATION
-------------------
Statement of Financial Accounting Standards ("SFAS") No. 131,
Disclosures about Segments of an Enterprise and Related Information was
adopted by the Company during 2000. This Statement establishes standards
for the way that the Company reports information about its operating
segments. The Company is comprised of two primary business segments,
banking and insurance. The following table sets forth information
regarding these segments for the three and six month periods ended June
30, 2002 and 2001.
Three Months Ended
June 30, 2002
BANKING ACTIVITIES INSURANCE ACTIVITIES TOTAL
Net Interest Income(loss) $2,632,933 ($ 5,281) $2,627,652
Provision for credit losses 105,000 0 105,000
---------- ---------- ----------
Net interest income(loss) after
provision for credit losses 2,527,933 (5,281) 2,522,652
Non-interest income 481,275 0 481,275
Insurance commissions and fees 0 714,606 714,606
Net securities gains 101,067 0 101,067
Non-interest expense 2,088,220 487,294 2,575,514
---------- ---------- ----------
Income before income taxes 1,022,055 222,031 1,244,086
Income taxes 229,000 88,000 317,000
---------- ---------- ----------
Net income $ 793,055 $ 134,031 $ 927,086
========== ========== ==========
Page 8
Six Months Ended
June 30, 2002
BANKING ACTIVITIES INSURANCE ACTIVITIES TOTAL
Net Interest Income(loss) $ 5,255,812 ($ 10,976) $ 5,244,836
Provision for credit losses 210,000 0 210,000
----------- ----------- -----------
Net interest income(loss) after
provision for credit losses 5,045,812 (10,976) 5,034,836
Non-interest income 1,033,204 0 1,033,204
Insurance commissions and fees 0 1,506,409 1,506,409
Net securities gains 111,302 0 111,302
Non-interest expense 4,178,823 1,009,491 5,188,314
----------- ----------- -----------
Income before income taxes 2,011,495 485,942 2,497,437
Income taxes 497,457 193,543 691,000
----------- ----------- -----------
Net income $ 1,514,038 $ 292,399 $ 1,806,437
=========== =========== ===========
Three Months Ended
June 30, 2001
BANKING ACTIVITIES INSURANCE ACTIVITIES TOTAL
Net Interest Income(loss) $ 2,305,298 ($ 6,198) $ 2,299,100
Provision for credit losses 95,000 0 95,000
----------- ----------- -----------
Net interest income(loss) after
provision for credit losses 2,210,298 (6,198) 2,204,100
Non-interest income 471,526 0 471,526
Insurance commissions and fees 0 627,678 627,678
Net securities gains 72,395 0 72,395
Non-interest expense 1,942,394 446,467 2,388,861
----------- ----------- -----------
Income before income taxes 811,825 175,013 986,838
Income taxes 260,735 76,000 336,735
----------- ----------- -----------
Net income $ 551,090 $ 99,013 $ 650,103
=========== =========== ===========
Page 9
Six Months Ended
June 30, 2001
BANKING ACTIVITIES INSURANCE ACTIVITIES TOTAL
Net Interest Income(loss) $ 4,521,227 ($ 14,407) $ 4,506,820
Provision for credit losses 170,000 0 170,000
----------- ----------- -----------
Net interest income(loss) after
provision for credit losses 4,351,227 (14,407) 4,336,820
Non-interest income 922,754 0 922,754
Insurance commissions and fees 0 1,302,798 1,302,798
Net securities gains 88,139 0 88,139
----------- -----------
Non-interest expense 3,774,379 954,557 4,728,936
----------- ----------- -----------
Income before income taxes 1,587,741 333,834 1,921,575
Income taxes 472,335 144,000 616,335
----------- ----------- -----------
Net income $ 1,115,406 $ 189,834 $ 1,305,240
=========== =========== ===========
11. RECLASSIFICATIONS
-----------------
Certain reclassifications have been made to the 2001 financial
statements to conform with the presentation used in 2002.
12. SUBSIDIARIES OF THE BANK
------------------------
Evans National Holding Corp. was incorporated in February, 2002 as a
subsidiary of the Bank. In March, 2002, the Bank assigned its interests in
approximately $65.7 million in real estate mortgages to Evans National Holding
Corp. in exchange for 10 shares of common stock, 1,600 shares of preferred stock
and 2,400 shares of excess stock, which represented all of the outstanding stock
at that time. Evans National Holding Corp. also entered into a Management and
Servicing Agreement with the Bank to provide management and other services to
it. Evans National Holding Corp. will be operated as a real estate investment
trust (REIT) which will provide additional flexibility and planning
opportunities for the business of the Bank. It is anticipated that Evans
National Holding Corp. will issue additional shares of non-voting preferred
stock to raise additional capital during 2002.
13. GOODWILL AND INTANGIBLE ASSETS
------------------------------
On June 29, 2001, the Financial Accounting Standards Board issued SFAS
No. 141, Business Combinations, which eliminates the pooling of interests method
of accounting for all business combinations entered initiated after June 30,
2001 and addresses the initial recognition and measurement of goodwill and other
intangible assets acquired in a business combination. The Company has adopted
this accounting standard for business combinations initiated after June 30,
2001.
As of January 1, 2002, the Company adopted SFAS No. 142, Goodwill and
Other Intangible Assets, which addresses the financial accounting and reporting
standards for the acquisition of intangible assets outside of a business
combination and for goodwill and other intangible assets subsequent to their
acquisition. This accounting standard requires that goodwill be separately
disclosed from other intangible assets in the balance sheet, and no longer be
amortized but tested for impairment on a periodic basis. The provisions of this
accounting standard also require the completion of a transitional impairment
test within six months of adoption, with any impairments identified treated as a
cumulative effect of a change in accounting principle.
Page 10
In accordance with SFAS No. 142, the Company discontinued the
amortization of goodwill effective January 1, 2002. A reconciliation of
previously reported net income and earnings per share to the pro forma amounts
adjusted for the exclusion of goodwill amortization net of the related income
tax effect follows:
Three Months Ended June 30,
2002 2001
---- ----
Reported net income $ 927,086 $ 650,103
Add: Goodwill amortization, net of tax 0 79,620
------------- -------------
Pro forma adjusted net income $ 927,086 $ 729,723
============= =============
Reported earnings per share $ 0.42 $ 0.30
Add: Goodwill amortization, net of tax per share 0.00 0.04
------------- -------------
Pro forma adjusted earnings per share $ 0.42 $ 0.34
============= =============
Six Months Ended June 30,
2002 2001
---- ----
Reported net income $ 1,806,437 $ 1,305,240
Add: Goodwill amortization, net of tax 0 159,240
------------- -------------
Pro forma adjusted net income $ 1,806,437 $ 1,464,480
============= =============
Reported earnings per share $ 0.82 $ 0.59
Add: Goodwill amortization, net of tax per share 0.00 0.08
------------- -------------
Pro forma adjusted earnings per share $ 0.82 $ 0.67
============= =============
Changes in the carrying amount of goodwill for the six month period
ended June 30, 2002, by operating segment, are as follows:
BANKING INSURANCE TOTAL
ACTIVITIES ACTIVITIES -----
---------- ----------
Balance as of January 1, 2002 $0 $2,760,113 $2,760,113
Goodwill acquired during the period 0 172,800 172,800
- ---------- ----------
Balance as of June 30, 2002 $0 $2,932,913 $2,932,913
== ========== ==========
As required by the statement, intangible assets that do not meet the
criteria for recognition apart from goodwill must be reclassified. As a result
of the Company's analysis, no reclassifications were required as of June 30,
2002.
Page 11
Information regarding the Company's other intangible assets follows:
As of June 30, 2002
CARRYING ACCUMULATED NET
AMOUNT AMORTIZATION ---
-------- ------------
Noncompete agreements $209,000 $23,150 $185,850
Insurance expirations 185,000 42,000 143,000
------- ------ -------
Total $394,000 $65,150 $328,850
======== ======= ========
As of December 31, 2001
CARRYING ACCUMULATED NET
AMOUNT AMORTIZATION ---
-------- ------------
Noncompete agreements $9,000 $2,250 $6,750
Insurance expirations 100,000 23,500 76,500
------- ------ ------
Total $109,000 $25,750 $83,250
======== ======= =======
Amortization expense for the three months ended June 30, 2002 was
$19,700. Estimated amortization expense for each of the five succeeding fiscal
years is as follows:
Year ending December 31, Amount
------
2002 $78,800
2003 78,800
2004 78,800
2005 73,350
2006 57,000
14. NEW ACCOUNTING STANDARDS PRONOUNCEMENTS
---------------------------------------
SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, was issued August 2001. This statement supercedes SFAS 121, APB No. 30,
and amends ARB No. 51. The Statement establishes a single accounting model for
long-lived assets to be disposed of by sale and resolve significant
implementation issues related to Statement 121. However, this Statement retains
fundamental provisions of Statement 121, Opinion 30, and ARB No. 51. The
Statement was effective for the Company beginning on January 1, 2002 and did not
have a material impact on the Company's financial statements.
Page 12
PART I - FINANCIAL NFORMATION
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This Quarterly Report on Form 10-Q may contain certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1993, as
amended (the "Securities Act"), and Section 21E of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), that involve substantial risks and
uncertainties. When used in this report, or in the documents incorporated by
reference herein, the words "anticipate", "believe", "estimate", "expect",
"intend", "may", and similar expressions identify such forward-looking
statements. Actual results, performance or achievements could differ materially
from those contemplated, expressed or implied by the forward-looking statements
contained herein. These forward-looking statements are based largely on the
expectations of the Company or the Company's management and are subject to a
number of risks and uncertainties, including but not limited to, economic,
competitive, regulatory, and other factors affecting the Company's operations,
markets, products and services, as well as expansion strategies and other
factors discussed elsewhere in this report and other reports filed by the
Company with the Securities and Exchange Commission. Many of these factors are
beyond the Company's control.
The Company's results of operations are dependent primarily on net
interest income, which is the difference between the income earned on loans and
securities and the Company's cost of funds, consisting of the interest paid on
deposits and borrowings. Results of operations are also affected by the
provision for credit losses, investment activities, loan origination, sale and
servicing activities, service charges and fees collected on deposit accounts,
and insurance services and fees. Noninterest expense primarily consists of
salaries and employee benefits, occupancy and equipment expense and technology
and communication expenses.
ANALYSIS OF FINANCIAL CONDITION
- -------------------------------
AVERAGE BALANCE SHEET
The following table presents the significant categories of the assets
and liabilities of the Company, interest income and interest expense, and the
corresponding yields earned and rates paid for the periods indicated. The assets
and liabilities are presented as daily averages. The average loan balances
include both performing and non-performing loans. Interest income on loans does
not include interest on loans for which the Bank has ceased to accrue interest.
Interest and yields are not presented on a tax-equivalent basis.
Page 13
THREE MONTHS ENDED JUNE 30, 2002 THREE MONTHS ENDED JUNE 30, 2001
AVERAGE INTEREST AVERAGE INTEREST
OUTSTANDING EARNED/ YIELD/ OUTSTANDING EARNED/ YIELD/
BALANCE PAID RATE BALANCE PAID RATE
(000) (000) (000) (000)
ASSETS
Interest-earning assets:
Loans, net $144,414 $2,677 7.41% $133,907 $2,841 8.49%
Taxable investments 50,440 720 5.71% 46,935 766 6.53%
Tax-exempt investments 43,104 494 4.58% 31,046 372 4.79%
Federal funds sold 3,538 12 1.36% 2,215 20 3,61%
-------- ------ -------- -------- ------- --------
Total interest-earning assets 241,496 $3,903 6.46% 214,103 $3,999 7.47%
====== =======
Noninterest-earning assets
Cash and due from banks 8,306 7,113
Premises and equipment, net 4,361 3,640
Other assets 8,435 8,207
-------- --------
Total Assets $262,598 $233,063
======== ========
LIABILITIES & STOCKHOLDER'S
EQUITY
Interest-bearing liabilities:
NOW accounts $ 9,973 $ 14 0.56% $ 8,810 $22 1.00%
Savings deposits 70,228 201 1.14% 63,078 387 2.45%
Time deposits 94,415 923 3.91% 86,613 1,177 5.44%
Fed funds purchased & securities
sold u/a to repurchase and other 4,004 21 2.10% 4,015 37 3.69%
FHLB advances 9,008 117 5.19% 6,126 77 5.03%
-------- ------ -------- -------- ------- -------
Total interest-bearing liabilities 187,628 $1,276 2.72% 168,642 $1,700 4.03%
------ -------
Noninterest-bearing liabilities:
Demand deposits 42,159 34,448
Other 4,596 4,076
Total liabilities $234,383 $207,166
-------- --------
Stockholders' equity 28,215 25,897
-------- --------
Total Liabilities and Stockholders' $262,598 $233,063
Equity ======== ========
Net interest earnings $2,627 $2,299
====== ======
Net yield on interest earning assets 4.35% 4.30%
Page 14
Total net loans outstanding increased by 3.9% to $147.7 million at June
30, 2002 from $142.2 million at March 31, 2002. Year-to-date, total net loans
have increased 3.7% from $142.5 million at December 31, 2001. During the
quarter, the Company continued to shift its loan mix towards higher-yielding
commercial loans. Total commercial loans increased 6.0% to approximately $102.0
million at June 30, 2002 from approximately $96.2 million at March 31, 2002.
Year-to-date, total commercial loans have increased 7.0% from $95.4 million at
December 31, 2001. Total consumer loans decreased slightly by 0.4% to
approximately $47.3 million at June 30, 2002 from approximately $47.5 million at
March 31, 2002. Year-to-date, total consumer loans have decreased 2.6% from
$48.5 million at December 31, 2001. Fixed rate residential mortgages accounted
for a large portion of this decrease as the balance outstanding has decreased
$623 thousand for the quarter and $844 thousand year-to-date. These results
continue to reflect the Company's strategy to deal with the current interest
rate environment by continuing to emphasize commercial loan originations while
selling fixed rate residential real estate loans originated under a certain
interest rate level. For the three and six month periods ended June 30, 2002,
the Company sold residential mortgages to the Federal National Mortgage
Association ("FNMA") totaling approximately $1.7 million and $4.4
million, respectively, as compared to approximately $1.9 million and $2.7
million, respectively, during the same periods in 2001. At June 30, 2002, the
Company had a servicing portfolio principal balance of $19.2 million with FNMA.
The Company maintains servicing rights on the loans that it sells to FNMA and
earns a fee thereon.
Page 15
LOAN PORTFOLIO COMPOSITION
The following table presents selected information on the composition of
the Company's loan portfolio in dollar amounts and in percentages as of the
dates indicated.
JUNE 30, 2002 PERCENTAGE DECEMBER 31, 2001 PERCENTAGE
($000) ($000)
COMMERCIAL LOANS
Real Estate $ 78,137 52.3% $ 73,863 51.3%
Installment 12,140 8.1% 10,549 7.3%
Lines of Credit 10,893 7.3% 10,001 7.0%
Lease Financing 810 0.5% 898 0.6%
Cash Reserve 62 0.1% 52 0.0%
---------- ---------- ---------- ----------
Total Commercial Loans 102,042 68.3% 95,363 66.2%
Consumer Loans
Real Estate 21,746 14.6% 22,228 15.5%
Home Equity 22,212 14.9% 21,681 15.1%
Installment 2,611 1.7% 2,761 1.9%
Overdrafts 101 0.1% 1,113 0.8%
Credit Card 295 0.2% 334 0.2%
Student Loans 183 0.1% 234 0.2%
Other 143 0.1% 188 0.1%
---------- ---------- ---------- ----------
Total Consumer Loans 47,291 31.7% 48,539 33.8%
---------- ---------- ---------- ----------
Total Loans 149,333 100.0% 143,902 100.0%
========== ========== ========== ==========
Net Deferred Costs & 353 353
Unearned Discounts
Allowance for Loan Losses (1,983) (1,786)
---------- ----------
Total Loans, Net $ 147,703 $ 142,469
========== ==========
The Company's total non-accruing loans, expressed as a percentage of
total loans, was 0.21% at June 30, 2002 as compared to 0.50% at December 31,
2001. Actual charge-offs for the three months ended June 30, 2002 were $4,400
compared to $500 for the same period in 2001. The decrease in non-accruing loans
is the result of payoffs received on four outstanding non-accrued loans. The
Company's allowance for loan losses increased to approximately $2.0 million at
June 30, 2002 from approximately $1.8 million at December 31, 2001. The
allowance for loan losses as a percentage of total loans was 1.33% at June 30,
2002 compared to 1.24% at December 31, 2001. This increase is primarily a result
of the increased amount of commercial loans. The increase in the loan portfolio,
especially the increase in commercial loans, which tend to have higher credit
risk than consumer loans, is reflected in the additional credit loss reserve
levels reflected at June 30, 2002 and December 31, 2001.
Page 16
The adequacy of the Company's allowance for loan losses is reviewed
quarterly with consideration given to loan concentrations, charge-off history,
delinquent loan percentages, and general economic conditions. Management
believes the allowance for loan losses is adequate to absorb credit losses from
existing loans.
The following table sets forth information regarding non-accrual loans.
JUNE 30, 2002 DECEMBER 31, 2001
------------- -----------------
($000) ($000)
Non-accruing loans:
One-to-four family $0 $0
Home equity 0 0
Commercial real estate and multi- 169 545
family
Consumer 0 0
Commercial business 148 179
------------- -----------------
Total 317 724
------------- -----------------
Loans 90+ days past due 981 443
------------- -----------------
Total non-performing loans $1,298 $1,167
============= =================
Total non-performing loans as a percentage 0.49% 0.47%
of total assets ============= =================
Total non-performing loans as a percentage 0.87% 0.82%
of total loans ============= =================
Page 17
INVESTING ACTIVITIES
The Company's securities portfolio decreased by 2.2% to approximately
$91.4 million at June 30, 2002 as compared to approximately $93.4 million at
March 31, 2002. Year-to-date, the securities portfolio has increased 8.7% from
$84.1 million at December 31, 2001. The decrease for the quarter can be
attributed to normal maturities and payments received during the quarter and are
tied closely to municipal savings deposits which typically decrease during the
second calendar quarter of the year due to the timing of tax deposits. Available
funds continue to be invested in US government and agency securities and
tax-advantaged bonds issued by New York State municipalities and school
districts.
FUNDING ACTIVITIES
Total deposits during the quarter increased by 1.8% to $218.0 million at
June 30, 2002 from $214.1 million at March 31, 2002. Year-to-date, total
deposits have increased 6.7% from $204.3 million at December 31, 2001. Tax
collections in local municipalities traditionally contribute to increases in
total deposits, usually certificates of deposit over $100,000 and municipal
savings accounts, during the first and third quarters and then decrease in the
second and fourth quarters as cash is needed by the municipalities for
operations. Core deposits (all deposits excluding time deposits greater than
$100,000), increased 3.3% to $187.6 million at June 30, 2002 from $181.5 million
at March 31, 2002. Year-to-date, core deposits have increased 7.0% from $175.4
million at December 31, 2001. NOW accounts, business savings, demand deposits,
statement savings, and passbook savings increased 18.4%, 13.8%, 13.4%, 5.4%, and
3.4%, respectively, for the quarter. These increases can be attributed to
industry-wide trends that show deposits at banks increasing, mainly as a result
of poor alternative investment performance such as the equities markets.
Municipal savings decreased 30.5% or $2.4 million for the quarter to $5.6
million at June 30, 2002. Securities sold under agreements to repurchase
decreased 4.9% to $2.9 million at June 30, 2002 from $3.0 million at March 31,
2002. Year-to-date, securities sold under agreements to repurchase have
decreased 28.7% from $4.0 million at December 31, 2001. The balance at December
31, 2001 was unusually large due to normal deposit activity.
OTHER BALANCE SHEET CHANGES
Properties and equipment, net, has increased approximately $318,000
year-to-date primarily as a result of renovations to a building the Bank owns
adjacent to the Derby branch on Erie Road, Derby, New York, which currently
houses the Bank's loan division.
MATERIAL CHANGES IN THE RESULTS OF OPERATIONS
- ---------------------------------------------
NET INCOME
The Company recorded net income of approximately $927,000 for the
quarter ended June 30, 2002, an increase of 42.6% over net income of $650,000
for the same quarter in 2001. Earnings per share were $0.42 for the quarter
ended June 30, 2002, and $0.30 for the same quarter in 2001. Year-to-date, the
Company has recorded net income of approximately $1.8 million or $0.82 per share
as compared to $1.3 million or $0.59 per share during the same time period in
2001. All share and per share information is stated after giving effect to the
stock split distributed on June 12, 2001 to shareholders of record on May 25,
2001. Net income represented a return on average assets of 1.40% for the quarter
ended June 30, 2002 compared to 1.12% for the same period in 2001. The return on
average equity for the first six months of 2002 was 13.59% compared to 10.34%
for the second quarter of 2001.
2002 second quarter net income reflects the January 1, 2002
implementation of Statement of Financial Accounting Standards (SFAS) No. 142,
which resulted in the end to systematic goodwill amortization. Excluding the
effect of goodwill amortization during the second quarter 2001, net income would
have been $730,000 or $0.33 per share. Excluding the effect of goodwill
amortization for the first six months of 2001, net income would have been $1.5
million or $0.67 per share.
OTHER OPERATING RESULTS
Net interest income increased $329,000, or 14.3%, for the quarter ended
June 30, 2002 compared to the same time period in 2001. Total interest income in
the second quarter 2002 decreased 2.4% and interest paid on deposits decreased
28.3% from the second quarter of 2001. Interest income decreased in spite of the
$27.4 million, or 12.8% annual increase in average interest-earning assets to
$241.5 million for the second quarter of 2002 from $214.1 million for the second
quarter of 2001. Interest rate reductions driven by the Federal Reserve monetary
policy were the primary reason for the decrease in interest income for the
second quarter 2002 as compared to the second quarter 2001. The increase in
average interest- earning assets resulted primarily from continued emphasis on
loan originations and increases in the investment securities portfolio as a
result of deposit balance increases. The yield on total interest earning assets
decreased to 6.46% for the quarter ended June 30, 2002 from 7.47% for the
quarter ended June 30, 2001. The interest expense decrease reflects the $19.0
million, or 11.2% annual increase in average interest-bearing liabilities to
$187.6 million for the second quarter of 2002 from $168.6 million for the second
quarter of 2001 as well as the offsetting effect of interest rate reductions
made by the Bank since June 30, 2001. The cost of interest-bearing liabilities
decreased to 2.72% for the quarter ended June 30, 2002 from 4.03% for the
quarter ended June 30, 2001. The Bank's net interest margin, for the three month
period ended June 30, 2002 was 4.46% as compared to 4.34% for the same time
period in 2001.
Page 18
The yield on average loans decreased to 7.41% for the second quarter of
2002 from 8.49% for the same time period in 2001. The tax equivalent yield on
federal funds and investments decreased from 6.85% in the second quarter of 2001
to 6.11% in the second quarter of 2002. The cost of funds on interest bearing
balances decreased to 2.72% for the second quarter of 2002 from 4.03% for the
same time period in 2001.
The provision for loan losses has increased to $105,000 for the second
quarter of 2002 from $95,000 for the same time period in 2001. This increase is
a result of the increase in the size of the overall loan portfolio as well as an
increase in the commercial loan composition as a percentage of the overall
portfolio. Commercial loans tend to have a higher credit risk than consumer
loans.
Non-interest income increased to $1.3 million for the quarter ended June
30, 2002 from $1.2 million for the same period in 2001. This increase of
$125,000 is primarily attributable to an increase of $87,000 in sales of
insurance products through M&W Agency, Inc. which acquired the business and
certain assets of the Eden Agency on January 1, 2002. The remainder of the
increase is attributable to $25,000 in service charge increases for which rate
increases were implemented in June 2001 and an increase by $29,000 in securities
gains on sales in the second quarter 2002 over the second quarter 2001. A
$62,000 loss on real estate property owned, pertained to a $90,000 write-down in
the carrying value of a foreclosed commercial property held as Other Real Estate
Owned, reflective of current market conditions and vacancies in such piece of
commercial property.
Non-interest expense totaled $2.6 million for the second quarter of 2002
reflecting an approximate $187,000 increase over the second quarter of 2001
total of $2.4 million. Approximately $176,000 of this increase is attributable
to salaries and employee benefits which have risen as a result of normal pay
adjustments and an overall increase in the number of employees of the Company.
Professional services decreased $27,000 primarily as a result of the effect of
expenses incurred during the second quarter 2001 related to the Company's
listing of its common stock on the Nasdaq National Market. Other insurance
increased $18,000 due to increased costs of insurance in the current market.
Evans Bancorp expense has decreased approximately $40,000 due mainly to the
second quarter 2001 effect of fees related to the Company's common stock on the
Nasdaq National Market which occurred on July 9, 2001. Miscellaneous expenses,
whose increase consisted of telephone, appraisal expense, ATM card fees,
correspondent bank service charges and M&W miscellaneous costs increased
approximately $93,000 for the quarter ended June 30, 2002 over the quarter ended
June 30, 2001. Amortization of goodwill related to the M&W acquisition decreased
$80,000 as goodwill is no longer amortized under the provisions of SFAS No. 142
which was adopted on January 1, 2002.
Income tax expense totaled $317,000 and $337,000 for the three month
periods ended June 30, 2002 and 2001, respectively. The effective combined tax
rate for the second quarter of 2002 was 25.5% compared to 34.1% for the second
quarter of 2001. The decrease in the effective tax rate is primarily
attributable to state tax advantages related to the recent establishment of
Evans National Holding Corp, the Bank's subsidiary real estate investment trust
and the elimination of goodwill amortization for book purposes.
ITEM 3 - QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
- ------------------------------------------------------------------
INTEREST RATE RISK
Interest rate risk occurs when interest-earning assets and
interest-bearing liabilities mature or reprice at different times or on a
different basis. The Asset, Liability Committee, ("ALCO") of the Bank analyzes
the gap position on a monthly basis to determine the Bank's exposure to interest
rate risk. The gap position is the difference between the total of the Bank's
rate- sensitive assets and rate-sensitive liabilities maturing or repricing
during a given time frame. A "positive" gap results when more assets than
liabilities reprice and a "negative" gap results when more liabilities than
assets reprice within a given time period. Because assets historically reprice
faster than liabilities, a slightly negative gap position is considered
preferable. At June 30, 2002 the Bank was in a positive gap position with $13.2
million more in rate-sensitive assets repricing over the next year than in
rate-sensitive liabilities. This "positive" gap position compares to a
"negative" gap position at December 31, 2001 of $0.4 million. This change is due
to a number of factors, increases in investments in currently-paying
collateralized mortgage obligations with short average lives and increases in
variable rate mortgages and variable rate commercial loans. Rate-sensitive
liabilities decreased in the category of long term certificates of deposits
greater than $100,000 and a reduction in securities sold under agreements to
repurchase (Repo) balances. The Bank's asset/liability target, under its
asset/liability policy, is a difference of +/- 15% of the Bank's total assets,
which amounted to +/- $39.6 million at June 30, 2002. The gap ratio
(rate-sensitive assets/rate-sensitive liabilities) at that date was 115%.
MARKET RISK
When rates rise or fall, the market value of the Bank's assets and
liabilities will increase or decrease. As a part of the Bank's asset/liability
policy, the Bank has set limitations on the negative impact to the market value
of its balance sheet that would be acceptable. The Bank's securities portfolio
is priced monthly and adjustments are made on the balance sheet to
Page 19
reflect the market value of the available for sale portfolio per SFAS No. 115. A
limitation of a negative 25% of total capital before SFAS No. 115 (after tax)
has been established as the maximum impact to equity as a result of marking
available for sale securities to market that would be acceptable. At
quarter-end, the impact to equity as a result of marking available for sale
securities to market was an unrealized gain of approximately $1.4 million. On a
quarterly basis, the available for sale portfolio is shocked for immediate rate
increases of 100 and 200 basis points. At June 30, 2002, the Bank determined it
would take an immediate increase in rates in excess of 200 basis points to
eliminate the current capital cushion. The Bank's capital ratios are also
reviewed on a quarterly basis. Unrealized gains and losses on available for sale
securities are not included in the calculation of these ratios.
PART II - OTHER INFORMATION
- ---------------------------
ITEM 1. Legal Proceedings - None to report
ITEM 2. Changes in Securities - None to report
ITEM 3. Defaults upon Senior Securities - None to report
ITEM 4. Submission of Matters To a Vote of Security Holders
The 2002 Annual Shareholders meeting of the Registrant was
held on April 23, 2002. At the meeting, Robert W. Allen,
William F. Barrett and David C. Koch were elected as directors
for a term of three years and James E. Biddle, Jr. was elected
as director for a term of two years. The following votes were
cast for the nominees:
FOR
Robert W. Allen 1,509,104
William F. Barrett 1,527,348
David C. Koch 1,506,527
James E. Biddle, Jr. 1,518,545
The following directors also continue their terms of office:
Phillip Brothman
Laverne G. Hall
Robert G. Miller, Jr.
David M. Taylor
James Tilley
Thomas H. Waring, Jr.
ITEM 5. Other Information - None to report
ITEM 6. Exhibits and Reports on Form 8-K
(a) EXHIBITS
Exhibit No. Name Page No.
99.1 Press Release-Announcing
Earnings for Quarter ended 21
June 30, 2002
99.2 Press Release-Announcing Intent
to Repurchase shares of 25
common stock
(b) REPORT ON FORM 8-K - None to report
Page 20
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.
Evans Bancorp, Inc.
DATE
July 25, 2002 /s/James Tilley
--------------------------------------------------
James Tilley
President and CEO
DATE
July 25, 2002 /s/Mark Debacker
-----------------------------------------------
Mark DeBacker
Senior Vice President & Chief Financial Officer